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Driverless cars may conjure images of Knight Rider’s KITT Car or scenes from the science fiction film "Minority Report." While some may hesitate to get into a vehicle without a driver, significant public discussion and substantial private investments are accelerating automated vehicles. 

Former Transportation Secretary Anthony Foxx said fully autonomous cars will be available to consumers within the next 10 years. And 19 major companies are claiming to put self-driving cars on the road by the year 2021. 

What is clear is that the next decade is likely to be the Decade of Driverless Cars. Some companies are declaring that their fully autonomous car will likely be hitting the road in the next five to six years, assuming the U.S. Department of Transportation, as well as local and state jurisdictions, put regulations in place.

For construction executives, the reality of these new vehicles is likely to be massive disruption, forcing a complete reexamination of strategies. For example, Houston’s central business district is comprised of 65 percent streets and surface parking with only 35 percent for buildings and parks. Even in Washington, DC, which has a sizable mass transit system, streets and parking take up 45 percent of the downtown central business district, and cars can occupy as much as 30 percent of the space within buildings.

So, how will driverless cars affect real estate use and future construction trends?

The Need for Parking Spaces Will Drop

To start with something fairly simple such as parking lot construction, there is currently a great deal of debate as to whether driverless cars will result in the need for more or less parking. Deloitte LLP's leader of global and U.S. real estate Bob O’Brien recently told Law360 that investors are already planning for a time when large parking garages are simply not needed. 

A report by Green Street Advisors, a California-based research firm, estimates that a decline in vehicle ownership could cut U.S. parking needs in half within 30 years. That would eliminate 75 billion square feet of parking space. To put that in perspective, this is more than the combined area of all apartment, office, shopping mall, retail strip center and warehouse buildings in the country today. That’s a lot of land to potentially repurpose.

Regardless of what happens, it seems likely that the values of parking garages and all parking lots will plummet. It also appears likely that much of above ground parking garage structures will be repurposed, although some inevitably will become obsolete due to floor-to-floor dimensions. 

Parking components for high-rise apartment buildings – which comprise as much as 15 to 20 percent of construction costs – seem likely to become unnecessary or at least reduced considerably. While this reduction in cost will increase developer returns, it will clearly cause construction budgets to take a hit. 

When combining these predictions with the current trends such as the introduction of urban mobility companies such as Uber and Lyft, it seems obvious that driverless cars are going to have a huge impact not simply on the construction of parking facilities in the future, but also on road construction and the construction of future apartments and condos (not to mention office high-rises and retail centers). 

What To Do?

Given that scenario, construction executives should begin planning now for this technology. Being prepared will ensure that construction projects don’t become obsolete before they are finished. Here are a few suggestions to aid in the planning process:

  • To plan for the future, new garages should be built with 15–18 foot floor-to-ceiling clearances to enable reuse in the future. The need for parking will diminish the auto sharing industry expands. Deloitte’s O’Brien has noticed that offices buildings with parking garages currently under construction are being built so that the garage has flat floors. The idea is that this space can easily be converted once driverless vehicles become mainstream.
  • Developers and construction firms should focus on providing for fewer parking spaces and allow the market to decide if parking is needed for new residential developments. Encourage parking that is unbundled. 
  • Construction executives need to recognize that the old standard of parking for retail centers (4.5-5 spaces/1000 square feet) is no longer needed. The good news is that these unused parking areas can now be repurposed to enable these centers to provide residential uses.
  • Another important component to be considered is how gas stations and convenience stores can be repurposed as electric vehicles and hybrids increasingly replace gasoline powered autos. Again, developers and construction firms need to determine how to best use that land.

Driverless cars are coming. There is no question that vast economic and cultural change will arrive with the driverless car, and that future construction will be clearly impacted in many ways. Smart developers, construction executives and transportation engineers should immediately begin analyzing these trends and how they plan to respond for the future. 


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